The forgotten pot of gold

ByEllen Berman and James Bishop Jr., Ellen Berman is executive director of the Consumer Energy Council of America in Washington. James Bishop Jr., formerly an aide to Energy Secretary James Schlesinger, is a Washington-based energy consultant.December 21, 1982

Holiday season or no, none but the naive would imagine that Washington politicians could resist the chance to dispense a pot of gold to consumers free from the national budgetary fandango. But resisting it they are.

Languishing in US treasury accounts within sight of the White House lies a pot of gold owed by the US government to millions of consumers who were overcharged by oil companies, beginning in 1973. In these accounts there is more than $500 million, soon to be augmented by another $3 billion now being collected by the Department of Energy. Moreover, if amnesty is not granted to the oil industry, another $10 billion could end up in that account.

Believe it or not, the funds, which were collected subject to strict legal restitution, show no sign of being dispersed. This administration, like its predecessor, is evidently immobilized by this obligation to return the funds to overcharged customers. In fairness, identifying specific victims is virtually unachievable since few consumers have kept their sales receipts over the years. But those bookkeeping difficulties do not absolve the government of its obligation. The funds were illegally taken from consumers and the law requires that they be returned to them.

In this regard, it has been argued that, since the injured parties cannot be identified, the funds should be transferred to the Treasury to reduce the deficit. But the courts have ruled that such a solution does not constitute restitution. In the meantime, numerous giveaway schemes have been devised. Some have been implemented, and, of those, most have backfired.

First, the Carter administration tried to give the consumers' overcharge money to US Army personnel to defray heating bills. When political pressures forced the abandonment of this scheme, it then gave $4 million to several charities during the final days of its term. When incoming Reagan officials discovered this final act of generosity, they cried politics. Swiftly, $1 million was retrieved and sent back into the Treasury account. Whether it was politics or a worthy cause, the scheme was easy to overturn because it didn't constitute true restitution either.

Of late, high-level administration officials, including the new energy secretary, Donald Hodel, have been trying to succeed where President Carter failed. By one administration account, the states will be given the idle overcharge funds. Is this restitution? Definitely not, because in these deficit-ridden times states will be tempted to use these funds for other than restitutionary purposes. The funds would likely be used in lieu of - rather than in addition to - monies appropriated for state projects. The law says this would not be restitution.

Is there, then, an answer at all? Of course there is, and, like the pot of gold, it would be a political winner for the administration, a solution which is sensible, moral, equitable, and, above all, would legally constitute restitution. In those cases where direct repayment is not possible, courts have achieved restitution through the adoption of a ''second best'' remedy - typically the creation of projects that benefit the affected public.

For instance, in one legendary overcharge case involving pharmaceuticals, where most consumers could not be identified, the court, acting as a trustee for the affected consumers, authorized funding drug programs such as community mental health centers, drug education programs, and other projects designed to provide a benefit to those who were overcharged.

In the case of the oil overcharge funds, they are already being held in trust by the government. Therefore, it takes no giant leap of the imagination to create a National Energy Trust, guided by a blue ribbon board, appointed by the President of the United States, and representing the affected population groups.

The proposed trust would be dedicated to supporting energy-related projects that reduce the cost of energy, including low-income weatherization, conservation education, and renewable technologies. Proposals would be sought from both the public and private sectors - states, cities, senior citizen and grassroots organizations, small businesses, and the like.

Operating like a major foundation, the trust would invest the principal of the overcharge funds and distribute investment income so that it would provide an enduring, systematic mechanism for granting restitution to millions of overcharged consumers. Properly managed as capital investments in innovative energy programs, the benefits for consumers would multiply over the years.

Unless such an appropriate course is pursued, ''the dream of equity,'' in Carl Sandburg's words, can never be realized. Instead, this languishing pot of gold will become a political nightmare for this administration as it was for the last and will be for the next. In short, by establishing a National Energy Trust , a spectacular failure of governance could be transformed into a dynamic new concept which would at once do justice to energy consumers and be a credit to any administration.